Handicapping the John Bates Clark Medal

It’s that time of year again when speculation mounts over what promising young U.S. economist will run off with the American Economic Association’s John Bates Clark medal.

Set to be announced Thursday, the Clark medal is the field’s second-most prestigious honor after the Nobel Prize in economics. It is given every year to the nation’s top economist under the age of 40. Unlike the Nobel, the Clark medal doesn’t include a monetary reward, but it brings significant professional benefits.

A number of Clark medal winners, including Milton Friedman, Paul Samuelson and Joseph Stiglitz, have gone on to win Nobel prizes. Harvard’s Lawrence Summers is a past winner, along with, more recently, MIT’s Esther Duflo, a pioneer in methods for analyzing antipoverty programs,and the University of California at Berkeley’s Emmanuel Saez, a leading researcher on wealth and income inequality.

This year’s contest for the “Baby Nobel,” as it is known, is fairly open, economists said. (“It’s really not obvious who will win,” one economist said. “In betting parlance, it’s called an ‘open field,’ where you have about six or seven horses, all on 10-to-1.”)

Two economists at the University of Chicago’s Booth School of Business, Matthew Gentzkow, 38, and Jesse M. Shapiro, 34, are among those being talked about. The two economists have collaborated on papers that harness data to analyze bias in the media.

Emmanuel Farhi, 35, of Harvard, also is considered by many to be a candidate, for his research in macroeconomics.

In a recent paper with MIT’s Ivan Werning—who turns 40 this year and is therefore ineligible—Mr. Farhi found that capital controls can be useful in reducing the risks of “hot money,” or volatile capital flows, even when a country has a flexible exchange rate. In other work, the two economists proposed a “progressive” estate tax—not a traditional tax on bequests from rich parents to children, but government subsidies to encourage less prosperous parents to make similar bequests.

Two other Harvard economists, Roland Fryer, 36, and Pol Antras, 38, are also top contenders.

Mr. Fryer, who won a MacArthur Foundation “genius” grant in 2011, is known for his education research. In a recent randomized field experiment, he showed how applying the practices of high-performing charter schools to low-performing public schools in Houston, Texas, boosted students’ math achievement. Mr. Antras, meanwhile, is known for work on trade, outsourcing and globalization.

Also on the short-list: Yuriy Gorodnichenko, 36, at the University of Calif., Berkeley; Ricardo Reis, 35, at Columbia University; and MIT’s Parag Pathak, who’s just 33. While Harvard’s Raj Chetty won last year at age 33, the AEA tends to go with economists over 35. The previous four winners before Mr. Chetty, for example, were all above 35.

One thing missing from this year’s unofficial short-list? Women.

MIT’s Amy Finkelstein, known for her research on health insurance and public policy, won the Baby Nobel in 2012, becoming only the third woman to ever win the award. (Ms. Duflo was No. 2 in 2010, and Susan Athey won in 2007. The Clark medal is now given out annually, but between 1947 and 2009, it was biennial.)

This year, the Clark award’s age limit pushes a former top contender, University of Calif., Berkeley’s Ulrike Malmendier, out of the race. Another name being talked about, Emi Nakamura of Columbia, 33, is unlikely now, but could be a top contender in coming years.

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